Reduce Unique ICDs by Redesigning the Product or the Process

The objective of this activity is to reduce the number of ICDs by reducing the occurrence of an ICD in producing a unit of Output, or by reducing the number of separate ICDs used in the Output. A unique ICD is one of the key activities in the work center's contribution to the final product (O). It is separate and distinct from any other activity in the work center. For example, the fastening of a part onto a subassembly and a quality control check of the subassembly would be unique ICDs.

B. Redesign the process of producing the ICD or Output

Change the process used to produce the ICD or Output to eliminate activities.

7. Standardize ICDs

Standardize procedures in functional costs:

No. Industry SIC Year Notes
1 2300 1992 Levi Strauss is now replacing 6 separate order-processing computer systems with one system under centralized control.
2 3571 2003 IBM's CEO aims to create a system that all divisions will use for tracking customer orders. IBM has already started doing the same where IBM buys components. Building a unified system for customers will be a first step towards a larger goal of creating a system in which 90% of orders can be processed, built, shipped and billed without human intervention.
3 3571 2004 Dell is applying its super efficient production model and adapting it to services. Just like for its products, Dell service is taking accountability for all the engagements it has. In fact, it's going beyond accountability and taking responsibility for all the various software and hardware players that may be part of its solutions. Dell plans to standardize service by finding ways to make processes more efficient, taking that saved money, and then giving it back to customers to increase demand for Dell's services and build market share.
4 3571 2006 Hewlett-Packard is making sweeping changes in the way of HP operations. The company will soon replace 85 loosely connected data centers around the world with six-cutting edge facilities. It will also be slashing thousands of smaller projects at the decentralized company to focus on a few corporate-wide initiatives – including scrapping 784 isolated databases for one companywide data warehouse. If the changes are successful, HP's annual spending on tech should be cut in half in the years ahead, from $3.5 billion in 2005.
5 3600 1994 GE once had 34 different payroll systems; now has just one. Has reduced financial processing centers from 5 to 1. This has allowed GE to cut finance operation payroll by 40%, from 1,000 people to 600, over past decade.
6 3714 2004 Autoliv reprocessed its factory to fend off stiff competition in airbags. It persuaded its suppliers, some of them 1,500 miles away, to change as well. Autoliv built a transfer dock in Indiana where shipments from suppliers in the East could be collected and loaded onto identically packed semis to make the trip to Ogden seven times a day. The trucks are evenly spaced and arrive like clockwork every 72 minutes, always bringing the same items in the same order at the same time. For every truck that comes in, three tugs deliver to the factory floor. Autoliv only keeps parts buffers amounting to two days' production on-site.
7 3861 1994 Xerox consolidated 7 general-ledger systems into one and centralized work from four data centers to one. Changes allowed Xerox to eliminate more than 100 positions in its finance operations.
8 4213 1998 Landstar has achieved margin expansion by consolidating and standardizing several back-office functions, with further gains expected in the coming years.
9 4215 2007 UPS adopted sophisticated training techniques to teach new hires how to do the job efficiently when it realized that its costly and time-consuming system was not yielding results. The shipper's 340 methods cover everything from where to get gas to how to carry keys to ensure that the job is done quickly and safely. A fall simulator trains drivers to avoid obstacles, and costly medical bills.
10 5141 1997 In addition, the sku number for all items is standardized in all distribution centers and order-entry systems. This centralization of buying makes possible centralized invoicing.
11 5311 1996 Sears cut down the channels through which store managers had to order products from 12 to 4. That helped increase the average load of delivery trucks to 90% of capacity from 60%.
12 5511 2007 Even a few outstanding bills can have a dramatic influence on a small company's bottom line. As they do not have the resources to hire full-time collections agents, some are turning to alternative resources. KTM Auto extended credit to many customers on an ad-hoc basis but did not have the means to collect. KTM adopted a credit policy outlining borrowing terms and a formal collections process. When a bill is overdue, the customer receives a collections letter. As a result of the system, the shop slashed overdue bills significantly and it saves money in annual bad debt write-offs.
13 6300 2004 Progressive invests about $500 million a year to create its information technology and the advantages this confers. The company makes sure that all managers follow consistent coding guidelines so that premium loss and expense information coming from any location is comparable with any other location. The company then aggregates this information into a central warehouse where a team of corporate statisticians mine the data looking for relationships.
14 6311 2003 In standardizing procedures, the company learned that while they had given employees considerable freedom in managing their work that made it difficult for other workers to fill in. Instead, the company standardized all processes.
15 8011 1997 The ideal IPA model for PhyMatrix consists of primary care physicians in primary markets with local medical management and significant hospital competition. When acquiring a new IPA, PHMX converts the IPA to its model (which generally takes 6-12 months).
16 8062 2006 Hospitals are creating new procedures aimed at reducing miscues as nurses and doctors transfer patients to the next shift. Kaiser Permanente has used a model called SBAR – an acronym for Situation, Background, Assessment, and Recommendation – to help nurses and doctors quickly organize their thoughts and convey the most critical information in just 60 seconds. At OSF St. Joseph Medical Center in Illinois, cases of harm to patients fell by more than half in the year after the SBAR program was implemented in 2004.
17 8071 2006 Hospitals are moving to cut dangerous lab errors through improved specimen collection and efficiency. In the main lab at Detroit's Henry Ford Health System in 2001, the lab started an educational program and began rejecting inadequate blood samples through a strict specimen-labeling policy, reducing the number of defective specimens from 1,700 a month to just 30.
18 8071 2006 Hospitals are moving to cut dangerous lab errors through improved specimen collection and efficiency. One of the most persistent problems is poor quality of specimens. In cancer diagnoses, the biopsies have high error rates, where tumor cells might not be extracted, and the lab will make a diagnosis on what it gets. In 2004, the University of Pittsburgh Medical Center developed a new, more rigorous process for collecting the specimens, including checklists for gynecologists to follow that map out correct procedures; both false positives and negatives have been reduced.

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